Zvamaida Murwira Senior Reporter
Government has formally engaged the Development Bank of Southern Africa for a $500 million loan to recapitalise the National Railways of Zimbabwe, the National Assembly has heard.
Transport and Infrastructural Development Minister Obert Mpofu said Government will, however, continue to cast its net wide and court other investors because it is concerned with the cost of the DBSA loan.
He was responding to a question from Chegutu West MP Cde Dexter Nduna (Zanu-PF) in Parliament on Wednesday who wanted to know what had happened to the DBSA loan.
“My ministry, in consultation with the Ministry of Finance and Economic Development, the Attorney-General’s Office, NRZ and DBSA have signed the mandate letter that allows the official engagement of DBSA to structure a loan facility to NRZ,” said Minister Mpofu.
“The mandate letter seeks to formalise the engagement between the NRZ and DBSA regarding the transaction and scope of work to be carried out by DBSA and mandates DBSA to mobilise funds for the execution of the project, and also discuss with the identified technical partners for both infrastructure and the rolling stock.”
Minister Mpofu said Government would consider other available options of investment given the cost of the DBSA loan.
“Government has directed that even as we consider the DBSA package, we also step up efforts at any other options available, particularly from China,” he said.
“Government’s concern is on the cost of the loan facility, hence the decision to consider other options.”
Cde Nduna also asked what had stalled the disbursement of $147 million loan from DBSA for the dualisation of Norton-Kadoma road.
Minister Mpofu said the release of $147 million was conditional to the completion of Plumtree to Mutare highway project, and review of fuel levy by 2c per litre on both petrol and diesel to be ring fenced to service the loan facility.
He said the actual rehabilitation of the Plumtree-Mutare road had been completed.
“Further, given the state of the Plumtree-Mutare road compared to other roads, the question is whether it would be prudent to apply that money on dualisation of that road or to apply it to other roads, for example the Chirundu to Harare road where accidents continue to happen particularly in the escarpment area.”
“With regards to the increase in fuel levy by 2c per litre, Government has not finalised its position on the issue.
“We are sensitive to the implications of such an increase on the fuel pump price,” he said.
Kuwadzana East MP Mr Nelson Chamisa (MDC-T) wanted to know what Government was doing to resuscitate railway infrastructure considering that countries like Japan were advanced in that regard.
Minister Mpofu said Government was engaging investors on whether to maintain narrow gauge or wider ones for speedy movement of trains.
“So, that is part of the engagement that we are having with potential investors, depending on regional consultations because our railway line is linked to the region,” he said.